Greedy Trial Lawyer
HMO's Save Money By Paying Providers Less
Category: News Defused
Managed Care Matters discovers that the supposed efficiency of HMOs in the delivery of health care is likely due to lower payments to providers. Should HMO members be told that they are receiving care from the lowest bidders?
HMOs cost less because they pay less
HMOs are cheaper than other forms of health insurance due to lower provider costs. At least that's what an analysis of a 2004 study comparing HMOs to other forms of insurance discussed by Jason Shafrin in a post on Healthcare Economist says.The difference amounted to 9.3%, with no measurable difference in utilization rates or risk selection between HMOs and other plans.
So, as an industry, HMOs are not more efficient because they are better at managing care or selecting risk, they are cheaper because they pay providers less. I would note that the analysis is based on data from the nineties, so perhaps a more accurate statement is that in the past HMOs were more efficient.
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